Medicaid Patients Increasingly Concentrated Among Physicians

Proportion of U.S. Physicians Accepting Medicaid Patients Down Slightly over Past Decade

News Release
Aug. 17, 2006

FURTHER INFORMATION, CONTACT:
Alwyn Cassil (202) 264-3484 or acassil@hschange.org

WASHINGTON, DC—Despite increases in Medicaid payment rates and enrollment, the proportion of U.S. physicians accepting Medicaid patients has decreased slightly over the past decade, according to a national study released today by the Center for Studying Health System Change (HSC).

In 2004-05, 14.6 percent of physicians reported receiving no Medicaid revenue, up from 12.9 percent in 1996-97, the study found. And about one-fifth of physicians (21 percent) reported accepting no new Medicaid patients in 2004-05—a rate six times higher than for Medicare patients and five times higher than for privately insured patients.

Care of Medicaid patients also is becoming increasingly concentrated among physicians who practice in large groups, hospitals, academic medical centers and community health centers as fewer small practices accept new Medicaid patients. For example, 35.3 percent of physicians in solo and two-physician practices were not accepting new Medicaid patients in 2004-05, up from 29 percent in 1996-97.

"It isn’t clear whether the increasing concentration is harmful to Medicaid patients’ access to care, since many large Medicaid providers are in areas where enrollees tend to live, such as inner cities and medically underserved areas," said Peter J. Cunningham, Ph.D., a senior fellow at HSC, a nonpartisan policy research organization funded principally by The Robert Wood Johnson Foundation.

"But, if large Medicaid providers face increased financial pressures and rising patient demand, quality of care and access to some services could be negatively affected," said Cunningham, coauthor of the study with former HSC Health Research Analyst Jessica H. May.

Previous research by The Urban Institute and HSC found that Medicaid payment rates increased modestly relative to Medicare rates between 1998 and 2003, despite some states reducing or freezing payment rates in the early 2000s because of severe budget pressures and rising Medicaid costs. According to the Centers for Medicare and Medicaid Services, Medicaid enrollment increased substantially during this period—8 percent overall between 2000 and 2003.

Among physicians accepting no new Medicaid patients in 2004-05, about five out of six (84%) cited inadequate reimbursement as a moderate or very important reason for not accepting new patients, according to the HSC study. Billing requirements and paper work were cited by 70 percent of physicians as reasons for not accepting new patients, while about two-thirds cited delayed reimbursement. A smaller percentage of physicians cited concerns about having a full practice or the high clinical burden of Medicaid patients. Physicians in solo and small practices were more likely to cite these factors compared with physicians in larger and institutional practices.

"Relatively low payment rates and high administrative costs are likely contributing to decreased involvement with Medicaid among physicians in solo and small group practices," Cunningham said.

Based on HSC’s nationally representative Community Tracking Study Physician Survey, the study’s findings are detailed in a new HSC Tracking Report—Medicaid Patients Increasingly Concentrated Among Physicians—available here. The 1996-97 and 2000-01 surveys contain information on about 12,000 physicians, and the 2004-05 survey includes responses from more than 6,600 physicians. Response rates for the surveys range from 52 percent to 65 percent. Other key study findings include:

• For physicians with between 1 percent and 9 percent of practice revenue from Medicaid, the percentage not accepting new Medicaid patients increased from 20.7 percent in 1996-97 to 27.1 percent in 2004-05. In contrast, less than 3 percent of physicians who derive 30 percent or more of their revenue from Medicaid were not accepting new patients, and this has not changed over the past decade.
• General internists and family practitioners were the most likely to report that their practices are closed to new Medicaid patients, while pediatricians and specialists were the least likely to have closed Medicaid practices. The only significant change in Medicaid acceptance rates occurred among surgical specialists with 18.8 percent of surgical specialists reporting they were accepting no new Medicaid patients in 2004-05, compared with 13.9 percent in 1996-97.
• Physicians in large metropolitan areas (population greater than 200,000) were less likely to accept new Medicaid patients compared with physicians in smaller metropolitan areas and in rural areas. Also, the percent of physicians in large metropolitan areas not accepting new Medicaid patients increased slightly, from 21.3 percent in 1996-97 to 23.6 percent in 2004-05.

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The Center for Studying Health System Change is a nonpartisan policy research organization committed to providing objective and timely research on the nation’s changing health system to help inform policy makers and contribute to better health care policy. HSC, based in Washington, D.C., is funded principally by The Robert Wood Johnson Foundation and is affiliated with Mathematica Policy Research, Inc.